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Papua New Guinea: Exxon Mobil's Gas Project

In Papua New Guinea, everyone is talking about Exxon Mobil's massive Liquefied Natural Gas (LNG) project. Scheduled to start shipping natural gas to Asia by 2014, the multi-billion dollar project is seen as a heaven-sent opportunity to boost Papua New Guinea’s gross domestic product and quickly change the face of the country. Hungry for development, PNG citizens are hoping Exxon Mobil will provide them with the public services and the jobs their government has never been able to create.

But the project raises the issue of land tenure as more than 60,000 PNG people hold "customary ownership" of the lands where gas and oil will be either extracted or transported. Given the central part that ancestral land plays in PNG people’s identity, livelihood and food security, there is a risk that all of this will be bartered for dollars. How will people react to the colossal amount of cash they will receive in the form of royalties? What about those who won’t be getting anything?

Started in 2010, the project’s first phase quickly became controversial as inflation increased inequality, and some teachers and healthcare workers left their work for the lucrative LNG project. Resettlement, cash distribution and training and employment issues have already generated discontent among the landowners, and it seems that some of the first cash windfalls were misappropriated and quickly spent, leading to family breakdown and social problems.

Although the project is obviously injecting a lot of cash into the country and improving the lives of many, doubts and frustrations regarding its mid- to long-term benefits are growing and some fear the situation will degenerate into conflict.